There's all kinds of options for partiers, but the most famous is the city's celebration in Puerta del Sol.
Madrid, the capital city of Spain and center for fashion, food, and historical sights, is famous for its traditional New Year's Eve celebration—a gathering of young and old in Puerta de Sol—and it's free for all those who attend.
Of course, there are other options. Partygoers can don their sparkliest of sequins and dance the night away at the seven-story nightclub Teatro Kapital. Bounce around the different floors, which offer several styles of music—and even one dedicated to karaoke. Don't miss spending time at the main stage, a full-size theater with multi-story balconies and stadium-size light displays. Your other alternative is Joy Eslava, a combination discoteca and nightclub that pull sin the masses on New Year's Eve. Although either option includes drinks galore, both can be pricey with entry starting around $50.
Which is what makes the traditional celebration in the city center that much more special. It's simple and no-frills, yet fun and at no cost. There's no sparkly ball or ornate production as the new year rolls in and the clock strikes midnight. Instead, crowds form in Puerta de Sol (generally after a pub crawl that starts earlier in the night), the city center of Madrid. They face the Real Casa de Correos, an old post office, which is crowned by a grand clock—that for years was the sole marker of the official time all throughout Spain. Today, it commissions the start of the new year.
Crowds schmooze all evening—the Mediterranean climate means you don't see anyone shivering or turning blue—and as the clock strikes midnight, Madrileńos put on colorful wigs and eat 12 grapes to usher in good luck for each of month that lies ahead. The grapes are supposed to be eaten in time to the 12 times that the clock chimes (denoting midnight). An elaborate fireworks display accompanies the revelry.
Many families also celebrate the holiday at home, eating a lavish seafood dinner and later watching the festivities in Puerta del Sol from the living room TV. Since in Spain the Christmas season begins on Christmas Eve (nochebuena) and lasts until Three Kings Day (Los Reyes Magos) on January 6, New Year's Eve is just another part of continued celebration.